Limited Equity Co-Op Opens in Melville
Huntington Supervisor Frank P. Petrone and Council Members Mark Cuthbertson and Tracey A. Edwards helped cut the ribbon June 15 marking the opening of Highland Green, Long Island’s first limited equity cooperative housing development.
Completion of the 117-unit, $34 million project represents a number of milestones, Supervisor Petrone noted in his remarks, including a final resolution to a decade-long debate over the composition of the units in the development and their ownership status: whether they should be for-sale or rental. The decision to make the development a limited-equity cooperative – similar to one the Supervisor owned in the Bronx before buying a house on Long Island many years ago – helped settle a lawsuit that had been brought against the original plan. The process also required convincing the state to approve the co-op plan and for the developer, D&F Development Group, to obtain funding from multiple sources, public and private.
What has resulted, the Supervisor noted, is a neighborhood that he hopes will become a model for future affordable housing: quality construction and monthly costs that are cheaper than rents while providing the equity accumulation of ownership.
Council Members Cuthbertson and Edwards echoed the Supervisor’s remarks and both highlighted the continuing need for affordable housing.
Peter Florey, one of the principals in D&F Development, thanked the Town for helping at many stages to make the project a reality. Also speaking was Ulysses Spicer, representing the Huntington branch of the NAACP, and Long Island Housing Partnership President Peter Elkowitz. The housing partnership helped obtain the financing, administered the qualification process for residents and will have a seat on the cooperative board.
Of the 117 units, 93 are for whose income does not exceed 60 percent of the area median income. The remaining 24 units went to persons whose income does not exceed 80 percent of the median. Ten percent of the units were set aside as preference for certain veterans, 10 for handicapped persons and four percent for the hearing or visually impaired. The development will have 72 one-bedroom units, 39 two-bedroom units and six three-bedroom units.
When the lottery was held last year, 171 persons applied. All of the units are occupied and there is currently a waiting list.
Supervisor Petrone proposed the limited equity coop as a way of settling the litigation that stemmed from a development, then called the Sanctuary at Melville, that was to be built as part of the approvals that allowed for construction of the over-55 community The Greens at Half Hollow. The developer for that project, as one of the provisions allowing in return for increased density at the Greens, was required to construct affordable one-bedroom units at the Ruland Road site. At issue in the suit were both the one-bedroom restriction and the fact that the units were to be for sale and no rentals. In suggesting the limited equity co-op alternative, Supervisor Petrone noted that they had been successful elsewhere in the country as a way of creating units where residents could earn equity while making rental-level monthly payments.
Limited equity cooperatives are designed to provide affordable home ownership to qualified income eligible residents by allowing residents to purchase shares in the development for a minimal amount of equity investment.
In the case of this co-op, purchaser paid the equivalent of two months’ maintenance as a down-payment; no mortgage or other type of financing was required. Residents will build equity because part of their monthly payments will go towards the reduction of a $10.8 million tax exempt bond used to finance the construction. The equity build up is equivalent to the remaining amount of the bond after amortization. The limited equity cooperative is structured to encourage long term stakeholders in the community. As such, shareholders will accrue equity benefits over time through the payoff of bond debt.